Korean Cluster Policies :
Retrospect & Prospect for smart Specialization Strategies
Outreach Workshop on Smart Specialization Strategy
Dongsoo Kim
Korea Institute for Industrial Economics & Trade (KIET)
2013. 4. 4
Contents
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Cluster Theory
Cluster Policies in Korea
Retrospect of Regional Industrial Policies in Korea
Current Korean Regional Industrial Policies
Regional Industrial Policies and Smart Specialization
Strategies
Source
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Industrial Policy and Territorial Development : lessons from Korea,
OECD 2011
White Paper on Regional Industry Development Policies, MKE 2013
Innovative Cluster Policies for Turkey, KDI KSP 2012
2
Cluster Theory
▶Scope
of Physical Clusters
- Type I : Industrial Complexes
- Type II : R&D Zones, Science Park
Industrial
Policy
- Type III : R&D Zones
- Type IV : Free Economic Zones
(Ⅱ)
▶Components
(Ⅳ)
of Innovative Clusters
Science
Technology
Policy
- Enterprises
- Universities
- Research institutes
- Efficient administration
3
(Ⅰ)
(Ⅲ)
Regional
Policy
Cluster Theory
1980s
Theoretical
Evolution &
Needs
1990s
Marshall
Porter
Miller & Morris
Industrial Parks:
Production
Concentration
Clusters:
Network
R&BD Clusters
Regional Industries
Accumulation of Human Cap
Specialization
Policy Tools
2000s
Collaboration
Innovative Investment
Industrial Infra
Industrial Complex
Skilled Labor
Innovative Infra
Networking
Governance
4
New Industries
IntegratedValueAdded
Practical R&D
TechTransfer
Venture Business Ecology
Global Networking
Cluster Theory
▶Scope
of Research for Innovative Clusters
- Building an innovative environment from physical industrial complexes
- Establishing components of clusters
- Region-oriented from nation-oriented
▶Korean
regional industrial development policies as the policies for innovative
clusters
5
Retrospect of Economic Development in Korea
Phase I
1960-1979
Economic
Dev
Economic Density
Phase II
1980-1997
Phase III
1998-
Distance
Division
Network Industrial Parks Regional Competitiveness
with Infrastructure
by Hub & Spoke
Costal Cities with
Industrial Parks
Selection & Concentration
full fledged Autonomy(‘94)
Rho admin(‘03-’08)
Park Admin(‘61-’79)
Time
Financial Crisis(‘97)
Oil shock
Factor Intensive
Technology
Innovation & Creativity
National Dev
National Dev
Regional Dev
Infra (Gyeongbu HWY,’70)
Light to Heavy Industries
Human Cap (KAIST,’78)
Heavy to Strategic Mfg
New Growth Engine
Strategic, Leading, Green Industries
6
Retrospect of Regional Industrial Policies
Industrialization
(1960~1970s)
Spatial
Redistribution
(1980s)
National
Competitiveness
(1990~1997)
Endogenous Growth
(1998~2002)
Regional Industrial
Dev
(2003~2007)
Deepening Regional
Industrial Dev
(2008~2012)
(‘08) Establishment of
Regional Industrial Dev
(‘03) SpecialAct for Balanced
National Development
(‘03) Industrial Tech
Establishment Project
(‘99) Regional Industrial
Promotion Project
(‘94) Full fledged autonomy
(‘95) Industrial Tech
(‘84) Capital Region
(‘67) Economic Dev Plan
Establishment Project
(‘72) National Land Dev Plan Reshuffling Plan
Distribution of small &
medium industrial
(‘70)
Free
Export
Zones
Complexes
(‘62) Industrial
(‘74)
Science
Park
Complexes
Source: White Paper on Regional Industrial Policies
7
(‘09) Economic Region
based Regional
Industrial DevProject
Retrospect of Regional Industrial Policies
▶Economic
Development Plan : 1960s – 1970s
- Strong Leadership with Grand National Plan Rebuilding Industries
- Labor intensive industries
Light Industries (Textile, etc)
Heavy Industries (Shipbuilding, Steel, Chemicals etc)
Special Economic Zone Policies
Industrial Parks, Free Export Zones, Science Park
Infrastructure (Highways and Railroads)
Export oriented development
8
Retrospect of Regional Industrial Policies
▶
Restructuring Industries for Advanced
Country : 1980s – 1990s
- Light Industries to Heavy Industries
- Selection & Concentration
Automobile
IT industries
Semiconductor
Telecommunications, etc)
Gini Index
- Regional disparity between capital
region and non-capital regions has
been widening
9
Retrospect of Regional Industrial Policies
▶Four
reasons behind the upsurge of the regional issue in the late 1990s
- Regional disparities and social conflicts
- Consolidation of democracy (Civilian government(’92), Autonomy(’94))
- Asian financial crisis (’97)
- The knowledge economy required the broadening of the technology-centered
focus of industrial policy to incorporate innovation
10
Retrospect of Regional Industrial Policies
▶Full
Fledged Local Autonomy since 1994
- National support for Regional Industries Promotion Projects from four local
governments in 1997
- Building capacities with regional infrastructure such as Technoparks, etc
▶Establishment
of Regional Development System in Rho Admin (‘03-’08)
- System for Regional Industrial Development based on Regional Innovation
System
- Focus more on R&D in tech development
▶Introduction
of Economic Region in Lee Admin (‘09- )
- Scale Economy and Collaborative Network
- Focus more on collaborative networking with
11
Current Regional Industrial Policies
Economic Region
Provinces
Counties
Spatial Scope
7 Economic Regions
16 Provinces
163 Local Areas
Project
Leading Industry Promotion
Projects (3yr, since 2009)
Strategic Industry Promotion
Projects (5yr, since 1999)
Specialized Local Industry
Promotion Projects (since 1995)
Objective
Industrial Competitiveness
Social Cohesion
Competitive Scaled Industry
Strategic Industry
Local Job Creation
Innovative
Governance
Leading Industrial Offices (7)
Technoparks (18)
Specialized Centers (80)
Regional Research Institutes (58)
Regional Innovative Centers (19)
Program
Leading Industry Program
Collaboration Program
R&D & Innovative Tech Program
Business Service Program
Planning Boards Program
Infra Program for Strategic Industry
Technopark Program
Local Based Industry Program
Program for RRI
Program for RIC
Budget
(million USD)
400.0 (’12)
385.0 (’11)
173.4 (’12)
268.8 (’11)
12
60.8 (’12)
101.1 (’11)
Current Regional Industrial Policies
- Spatial scope of the regional industrial policy
13
Current Regional Industrial Policies
- regional industrial development projects
▶Leading
Industry Promotion Projects in 7 Economic Regions
- The purpose of the Leading Industry Program in 5+2 Economic Regions is
to foster into world-class industries
to improve the industrial competitiveness of promising products
to expand the foundation for value creation
- The purpose of the Collaborative Program in 5+2 Economic Regions is
to encourage collaborative cooperation across Provinces
14
Current Regional Industrial Policies
- regional industrial development projects
▶Strategic
Industry Promotion Projects in 16 Provinces
- Establishment Program for Local Industrial Foundations
Comprehensively support tech development and commercialization
through joint-establishment and use of equipment and facilities by
building local strategic industry complexes or innovation bases
- R&D for Local Industry, Innovative Tech Program
Develop core tech for strategic industries to promote balanced
development
- Business Service, HR Dev Program for Local Industry
Provide technical instruction, advice, marketing and knowledge support
services using local infrastructure
15
Current Regional Industrial Policies
- regional industrial development projects
- Regional Strategic Industry Planning Board Grogram
Establish industrial integration planning bodies to efficiently promote
local strategic industry promotion projects
- Promotion Program for Local Innovation Base (Technopark)
Enhance the function of regional innovation bases centering on
established Technoparks and provide comprehensive services for company
support
16
Current Regional Industrial Policies
- governance
Presidential Committee on Regional Dev(PCRD)
▶ Ministry
of Knowledge
Economy(MKE)
▶ KIAT :
▶ KIET :
Ministry of
EducSci&
Tech (MEST)
window agency of MKE
Ministry of
Knowledge
Economy (MKE)
Other
Ministries
Nation
research institutes
KIET
▶ Leading
Nat. Research
Foundation
(NRF)
Industry Office (7)
anchor agency
KOR Institute for
Advancement of
Tech (KIAT)
Economic Region DevCommittees (ERDCs)
▶ Technoparks (18)
& Specialized
Centers : anchor agency
▶ RRIs
and RICs in Local Universities
HR Dev
Centers
17
Region
Leading
Industry
Offices
Technoparks,
Specialized Centers,
RRIs & RICs
Local Govt’s
Province
County
Current Regional Industrial Policies
- central governance
▶KIAT (Korea
Institute for Advancement of Technology) : a window agency
- The Regional Industry Division
studies regional industrial development policies
manages and evaluates regional industrial promotion projects
disseminates successful projects
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Current Regional Industrial Policies
- local governance
▶Technoparks in
16 Provinces : anchor agencies
for Strategic Industry Promotion Projects
- nurture local industries by forming organic
cooperative networks with the regions’
innovative institutions including industry,
academy, researches and governments
- create strategies and plans that fit the regions’
circumstances and characteristics through
discovering knowledge-based and small but
technologically capable businesses.
Regional
Industry and
Policy
Planning
Business
Supports
Fostering
Small-bulStrong
Businesses
Business
Creation
19
Technoparks as
Basis for
Nurturing
Regional
Industry
Tech
Innovation
Strengthen
Regional &
National
Competitiveness
Stronger
Cooperation
Among
Related
Parties
Current Regional Industrial Policies
- local governance
▶80
Specialized Centers : R&D and specialized business support
Technoparks
Specialized Centers under TP
Seoul TP(’05)
(Digital Contents, Bio,
IT Communications, Finance)
Gyeonggi Daejin TP( ‘05)
(IT Telecommunications, Bio,
Contents,Logistics)
Gyeonggi TP(‘98)
(IT Communications, Bio,
Contents, Logistics)
Independent Centers
Songdo TP(‘98)
(Logistics, Auto,
Machineries, IT)
Misc Centers
Semi-Conductor Center
IT Convergence Center
Bio Center
Bio Center
Display Center
Media Center
Auto Parts R&D Center
Nano Fab
Center at
KAIST
Bio Center
Robot Center
Radio Engineering Center
Nano Material Center
(Institute for Bio Industry
(Institute for Automobile Tech
(Mechanical Carbon Institute
Association for Photonics
Electrical Tech Institute
Photonics Tech Institute
Institute for Indus Tech
Radiation Imaging
Tech Center
AutoPartsCenter
New Material Industry Center
Polymer Material Center
(Bio Foundation
Bio Food Tech Center
Bio Pharmaceutical Research Center
Nano Bio Research Center
Biological Control Center
Natural Resource Research Center
Acceleration & Plasma Association
Cheorwon Plasma Research Institute
Gangneung Science Industry Foundation
(Wonju Medical Industry Techno Valley
(Chuncheon Bio Industry Foundation
Ceramic Material Cluster Center
Disaster Prevention Center
Gangwon TP(‘03)
(Medical Device, Bio,
Materials, Tourism)
Chungbuk TP(‘03)
(Semiconductor, Batteries,
IT, IT Convergence)
Gyeongbuk TP(‘98)
(Electronics, Materials,
Oriental Medicals, Tourism
Chungnam TP(‘98)
(IT, Auto Parts,
Culture, Agri-Bio)
Daegu TP(‘98)
(Fiber, Bio,
Mechatronics, IT)
Daejeon TP(‘08)
(IT, Bio,
Mechatronics, Parts)
BioInfoCenter
NanoApplicationCenter
MobileConvergenceCenter
BioHealth ConvergenceCenter
OrientalMedicalCenter
GyeongbukUnivCenter
Pohang TP(‘00)
(Steel, Nano Materials,
Robots)
Jeonbuk TP(‘03)
(Auto Parts, Bio,
RFT, Culture)
Bio Industry Institute
(Vehicle Embedded Tech Center
(Hybrid Component Institute
Marine Bio Institute
(Gumi Electronics & Info Tech Institute
(Pohang Institute of Metal Industry
IT Convergence Tech Center
Ulsan TP(‘04)
(Auto, Refined Chemicals,
Marine, Environments)
Mechatronics&MaterialInstitute
DyeTechInstitute
SewingTechInstitute
TextileDevelopmentInstitute
FoundationofAutomotivePartsPromotion
Auto Parts Center
Fine Chemical Center
Testing Research Institute
Institute for Chemistry
Institute for Indus Tech
Gwangju TP(’98)
(Photonics, Auto Parts,
Electronics)
Busan TP(‘00)
(Machineries, Image IT,
Marine, MICE)
Jeonnam TP(‘03)
(Bio, Materials,
Logistics, Tourism)
Jeju TP(‘10)
(Bio, Digital Contents,
Tourism, Agri-Bio)
Bio Center
Mobile Telecommunication Center
Volcanic Seawater Center
Gyeongnam TP(‘04)
(Machineries, Robots,
Home Appliances, Bio)
HomeApplianceCenter
KnowledgedMachineriesCenter
RefinedDeviceCenter
AeroCenter
Gimhae Medical Bio Center
Bio21 Center
Industrial Complex Corporation
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Machine Component Tech Center
Auto Component Tech Center
Marine Life Industry Promotion Center
MEMS/NANO Component Center
Heat Exchange Center
Logistics Managementt Tech Center
Smart Electronic Component Center
Institute for Leather & Footwear
Marine Equipment Association
(Marine Equipment Research Institute
Institute for Medium & Small Shipbuilding
Institute for Indus Tech
Current Regional Industrial Policies
- local governance
▶Regional
▶Regional
Innovation Centers in
Specialized Local Industry Promotion
Projects at universities
Research Institutes in County
govt’s for independent industrialization
based on small R&D
- established as a collaborative project
between enterprises and universities since
1995
Research
Facilities
Tech
Commercia
lization
R&D
Project
Marketing
Human
Resource
Network
Business
Incubating
plan & evaluate
projects
network
(workshop etc)
Tech
Transfer
21
R&D
support
monitor
project with
DB
support local
govt’s in
planning
Current Regional Industrial Policies
- summary
▶Zoning
to ecology building
- industrial location policy to support programming
▶Selection
& Concentration
- sectoral targeting (e.g. phonics in Gwangju, medical device in Gangwon, etc)
- smart specialization and tailor made support
▶Paradigm
Shifts : Decentralization since 2003
- national clusters to local clusters
▶Infrastructure
▷▷R&D support▷▷Networking & Ecology
22
Current Regional Industrial Policies
- Leading Industries in Economic Regions
Gangwon Economic Region
Sudo Economic Region
Frontier Well-Being
Global Business Hub
Medical Bio
Tourism
Financial Business
Advanced Manufacturing
Daegyeong Economic Region
Chungcheng Economic Region
Knowledge Industry Area
Korean Silicon Valley
Mobile
Green Energy
Medical Bio
Semiconductor
Dongnam Economic Region
Honam Economic Region
Logistic Hub
Green Area
Machineries
Materials
Solar Energy
Green Tech Industry
Jeju Economic Region
International Free City
Water
Leisure
23
Current Regional Industrial Policies
- Strategic Industries in Provinces
Seoul
Digitals
IT
Bio
Finance
Incheon
Logistics
Automobile
Machineries
IT
Daejeon
IT
Bio
Hi tech Materials
Mechatronics
Jeonbuk
Auto Parts
Bio
New Energy
Tourism
Gwangju
Photovoltaics
Electronics
Auto Parts
Design
Gyeonggi
IT
Bio
Software
Logistics
Gangwon
Bio
Medical Devices
New Materials
Tourism
Chungnam
Electronics
Auto Parts
Culture
Bio
Gyeongbuk
Electronics
New Materials
Bio
Cultures
Chungbuk
Bio
Semi Conductor
Mobile Phone
2nd Battery
Gyeongnam
Machineries
Robot
Knowledge Home
Bio
Daegu
Mechatronics
Electronics
Textile
Bio
Ulsan
Automobiles
Maritime
Fine Chemicals
Environments
Jeonnam
Bio
Shipbuilding
Logistics
Tourism
Busan
Logistics
Parts
Tourism
Film
Jeju
Tourism
Health Bio
Environments
Digitals
24
Prospect of Regional Industrial Policies
▶Industrial
Ecology based on specialized regional industries
- entities own role : enterprises, universities, research institutes & governments
- active & productive networking based on open innovation
Policy Tools
Key players
Planning
Technology
Development
Human
Resource
Enterprises
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Universities
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Institutes
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Governments
/ agencies
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25
Business
Support
Collaborative
Networking
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Prospect of Regional Industrial Policies
▶Sustainable
Consistent Policies
- long-term planning under stable policies
- trial & error over time due to frequent changes in policy
▶Wariness
of Complexity & Inefficiencies
- governance (& Quango) problem from multi layers of policies
26